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Legislation & politics

In his State of the State address, Illinois Republican Governor Bruce Rauner proposed multiple labor law reforms intended to reduce costs and improve state and local government efficiency. Among the Governor’ proposals are creating localized right­to­work zones, limiting prevailing wage requirements and eliminating project labor agreements in public works projects, and cracking down on unemployment benefit fraud and the abuse of the workers’ compensation system. He also proposed loosening tenure laws and implementing performance rewards for teachers, overhauling public retirement systems to shift current government workers to Section 401(k) plans, and prohibiting public sector unions that have collective bargaining agreements with State or local government from making campaign contributions. Governor Rauner further suggested increasing Illinois’ minimum wage by $.25 a year from the current $7.25 to $10.00 in 2022. Union leaders and Democrats, who control both houses of Illinois’s General Assembly, are skeptical of the proposals.

As promised in his State of the State address, Governor Rauner signed an executive order to block unions from requiring state workers to pay to support union activities. Citing the recent U.S. Supreme Court case Harris v. Quinn, the Governor stated that forcing state employees to support union activities is unconstitutional. The Governor simultaneously filed a declaratory judgment action in the Northern District of Illinois. State employees presently pay an average of $577 each in what have been called “fair share” payments to unions, regardless of whether the employees agree with the unions’ political activities. More than 6,500 Illinois state employees are forced to pay the fees despite having refused union membership.

Colorado legislators failed to pass right­to­work legislation for the third time since 2013. In a 6­5 vote, the House State, Veterans, and Military Affairs Committee defeated the proposal, which would have prohibited employers from requiring employees to pay dues, fees, or other assessments to any third party, including labor unions and charities. Under the proposed legislation, all existing provisions that require union membership as a condition of employment would be voided.

Republicans in the U.S. House and Senate have challenged new NLRB rules governing representation elections through a joint resolution filed under the Congressional Review Act. The new rules, passed by the NLRB in a 3­2 vote, will accelerate representation elections by allowing unions to transmit election petitions electronically, by requiring pre­election hearings within seven days of filing petitions, and by postponing voter eligibility and other disputes until after elections are complete. Congressional Republicans argue that the new rules are intended stack the odds in favor of unions, but President Obama is likely to veto the joint resolution. The U.S. Chamber of Congress and other business groups have also challenged the rule in federal district courts in the District of Columbia and Texas, arguing that the rule is arbitrary, contrary to the NLRA, and violative of free speech rights. Chamber of Commerce v. NLRB; Assoc. Builders & Contractors of Texas, Inc. v. NLRB.

The U.S. Senate Health, Education, Labor and Pensions Committee held a hearing on the NLRB’s new election rules at which a former Board member described the rules as “no less than an attempt by the NLRB to put its thumb on the scale in favor of union representation”. Similarly, the U.S. Chamber of Commerce and the National Federation of Independent Businesses argued that the changes would significantly hinder the ability of businesses to respond to the filing of election petitions. While union attorneys claimed that the current election system allows some employers to delay proceedings, Committee Chairman Lamar Alexander stated that he did not see a need for the changes as the board has achieved a median time of 38 days between petitions and elections and because 95 percent of elections take place within 56 days of the filing of petitions.

Pro­business organizations and individual franchise business owners have formed the Coalition to Save Local Businesses to combat NLRB efforts to expand joint employer liability. The NLRB’s anticipated ruling in Browning­ Ferris Industries of California, Inc. is expected to implement a “totality of the circumstances” joint liability standard, instead of the current “direct control” standard. The Coalition, which along with individual businesses includes the U.S. Chamber of Commerce, the National Retail Federation, and the International Franchise Association, argues that the change would increase litigation and costs and would cause uncertainty for businesses. While the Coalition intends to urge lawmakers to pass legislation to maintain the current standard, any proposed legislation would be likely to face legislative hurdles or a presidential veto.

Senator Marco Rubio and Representative Todd Rokita introduced legislation to amend the NLRA to allow employers to pay bonuses and merit pay to employees covered by collective bargaining agreements. The Rewarding Achievement and Incentivizing Successful Employees (RAISE) Act would allow employers to “pay[] an employee in [a bargaining] unit greater wages, pay, or other compensation for, or by reason of, his or her services as an employee of such employer, than provided for in such contract or agreement.” Similar legislation has been introduced, but failed to pass, in recent years. Unions and civil rights groups have historically characterized similar legislation as attempts to undermine collective bargaining and to undercut the pay of minority workers. Senator Lamar Alexander, Chairman of the Senate Committee on Health, Education, Labor and Pensions, stated that “[t]his bill will give employers the freedom to pay their employees more for a job well done, for their dedication and hard work, rather than for their time spent in a union.”

Wisconsin is expected to pass fast­track right­to­work legislation in an “extraordinary session,” becoming the 25th state to enact a right­to­work statute. Republican Senate Majority Leader Scott Fitzgerald has stated that he has the necessary 17 votes to pass the legislation in the Senate. The State Assembly, where Republicans control 63 of 99 seats, will take action once the Senate has passed the bill. Governor Scott Walker, who in 2011 championed public sector union reform through Wisconsin Act 10, is widely expected to sign the legislation. Assembly Speaker Robin Vos stated that the public “widely supports worker freedom” and noted that the legislation could positively impact the state’s economy. Democratic Assembly Representative Lisa Subeck alleges that the fast­tracked legislation is intended to “keep the public in the dark”, while Wisconsin AFL­CIO president Phil Neuenfeldt characterizes the legislation as “anti­-worker”.

In a letter to the Department of the Interior’s Bureau of Indian Affairs, Governor Walker rejected a plan to construct a casino on non­tribal lands in Kenosha, Wis. The Menominee Indian Tribe and London­based Hard Rock International proposed the project, for which the UCFW had agreed to cancel a card­check agreement, which would have allowed casino workers to choose union representation by signing authorization cards instead of through an NLRB election. Governor Walker said that “the long­term economic hit [from the project] to the state budget would be a potential loss of hundreds of millions of dollars.”

At a press briefing on the opening day of the AFL­CIO Executive Council meeting, federation President Richard Trumka stated that raising wages for union­represented and non­represented workers will remain at the center of the AFL­CIO’s agenda. The federation will focus its efforts in the South in particular, where organized labor is less prevalent. During the meeting, the executive council will, among other things, discuss the establishment of a “labor commission on race and social justice issues.”

In a 37­30 party­line vote, the New Mexico House of Representatives passed right­to­work legislation that would prohibit, as a condition of hiring, promotion, or continued employment, requiring a person to become or remain a member of a labor organization or to “pay dues, fees, assessments, or other charges to a labor organization or to a charity or other third party, in lieu of payment to a labor organization.” House Republicans and Republican Governor Susana Martinez strongly support the bill, but Democrats, who control the Senate, vow to block the legislation. When fair share workers are included in the count, about 7.5 percent of New Mexico’s workers are unionized. The bill includes a $.50 raise in the minimum wage to $8.00.

In the absence of guidance on the implementation of the Affordable Care Act’s excise tax on high­cost “Cadillac” health plans, negotiations for collectively bargained plans face uncertainty. Beginning in 2018, health plans that provide coverage more than $10,200 for individuals or more than $27,500 for families will be taxed at 40 percent of the portion of the plan that exceeds those amounts. Employers and unions are seeking specific guidance on how the tax will be applied in practice as many collectively bargained health plans that are currently being negotiated will be in place through 2018.

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